The value of a second-hand car website from India has rocketed to more than $1bn helping it to achieve unicorn status.
With people looking to get access to alternatives to public transport such as pre-owned cars during the pandemic, a significant increase in its business has been witnessed by India’s Cars24.
When a national lockdown was implemented across India to prevent the spread of the pandemic, the popular but unreliable rail networks of the country was were shut down completely.
A privately owned start-up firm achieves unicorn status when its market value reaches more than $1bn.
Some of the other start-ups that have expanded and grown to achieve unicorn status and have become household names include Uber and Airbnb.
The number of people infected by the novel coronavirus in India has surpassed 9 million and various state governments are again consider4ing options of imposing more lockdowns,
There are many people in the big cities of the country who are still trying to avoid public transport because of fears of contracting the virus while commuting, even though trains and buses have been restarted services in India’s big cities.
This has resulted in an increase in demand of used cars – the ones that Cars24 deal in. The company is based in the city of Gurgaon, near New Delhi. There has been a 20 per cent rise in sales of the compared to pre-lockdown levels by the middle of this year and demand for cars from its website continues to rise.
“People who did not have cars were looking to own a car due to safety issues while many others wanted to upgrade from two-wheelers,” said founder and chief executive Vikram Chopra.
Investment firm DST Global, which lea a $200m funding deal for Cars24 which was announced by the company on Tuesday, has shown a special interest in the potential of the Indian company. Based in Hong Kong, over the years, DST Global is known to have invested in a number of high profile tech companies which includes very well-known names such as Facebook, WhatsApp and Alibaba.
The value of the online platform surpassed the sought after $1bn mark during the latest round of financing that the company had organized. Currently there are about 500 unicorn companies around the world, according to the business analytics firm CB Insights.
Chopra faced issues in selling his own car and had to eventually give it away to a friend that prompted him to star the platforms and the company.
“The market for used cars and bikes in India is a huge $50bn opportunity,” he explained.
Investment in the Indian online shopping company Flipkart, has been made by DST. Two years ago, 80 per cent of the Indian online hopping company was acquired in a record deal by the largest retailer of the world Walmart.
(Adapted from BBC.com)